Vietnam raises $245 mln from refinery operator Binh Son's IPO

The Vietnamese government has raised VND5.57 trillion ($245 million) by selling a 7.79 percent stake in refinery operator Binh Son Refining and Petrochemical company in an initial public offering, the company said on Wednesday.

The proceeds exceeded the Vietnamese government’s plan to raise at least $155 million from the sale.

The stake sale is part of the Vietnamese government’s plan to privatize hundreds of state-owned enterprises to boost their performance, relax a tight state budget and reform an economy that is highly reliant on foreign investments.

Demand at Wednesday’s IPO of Binh Son (BSR), which operates Vietnam’s first oil refinery, exceeded supply by 2.7 times, the firm said on its website.

A total of 4,079 investors took part in the sale, including 74 foreigners, BSR said. Overseas investors bought a 4.77 percent stake in the company at the IPO.

“It is a high quality asset and therefore is highly evaluated by the market,” BSR’s Chief Executive Officer, Tran Ngoc Nguyen, told Reuters.

Vietnam was among the fastest rising stock markets last year, with the benchmark VN Index leaping nearly 50 percent in 2017 supported by listings and share sales in companies such as brewer Sabeco, mall operator Vincom Retail and budget airline Vietjet Aviation.

A further 49 percent stake in BSR, the operator of the $3-billion Dung Quat oil refinery, will be sold to strategic investors, including both domestic and foreign investors, but its foreign ownership is capped at 49 percent.

Vietnam has a shortage of refinery products, with Dung Quat refinery capable of supplying only 30 percent of domestic demand.

Nghi Son refinery, due to start commercial operations this year, would bring total domestic supply to 80 percent of demand.

BSR is among dozens of units under the wing of state oil and gas company PetroVietnam (PVN).

PVN is caught up in a widespread corruption crackdown. Many PVN officials are on trial or have been given sentences ranging from jail terms to the death penalty.

BSR estimated its 2017 net profit jumped 79 percent from a year earlier to 8.03 trillion dong.

The Vietnamese government is also selling shares in two other state energy firms, Petrovietnam Power Co and PetroVietnam Oil Corp, later this month.